Why Heating Is Canada’s Biggest Home Energy Cost
Canadians spend more on heating than almost any other country. Heating accounts for 60–65% of home energy use on average, making it the largest opportunity for savings. Costs vary enormously by province, fuel type, and home insulation.
The strategies below are organized from free/low-cost to major investment, so you can pick the ones appropriate for your budget.
Free Strategies
1. Optimize your thermostat settings
| Time | Recommended Setting | Potential Savings |
|---|---|---|
| Home and awake | 20°C (68°F) | — |
| Sleeping | 16–18°C (61–64°F) | 3–5% |
| Away from home | 14–16°C (57–61°F) | 5–10% |
Total thermostat optimization savings: $100–$300/year for an average home.
2. Use your curtains and blinds strategically
- Open south-facing curtains during sunny days — solar gain can contribute meaningful heat
- Close all curtains at night to reduce heat loss through glass (curtains reduce window heat loss by 10–15%)
- Heavy thermal curtains on north-facing windows provide the greatest benefit
3. Check and replace furnace filters monthly
A clogged filter makes your furnace work harder and run longer. Replacing a dirty filter improves efficiency by 5–10%. Filters cost $5–$30.
4. Bleed radiators (hot water systems)
If you have a radiator-based system and some radiators are cold at the top, bleeding trapped air restores full efficiency. This costs nothing but a radiator key ($5 at hardware stores).
5. Reverse your ceiling fans
In winter, set ceiling fans to rotate clockwise at low speed. This pushes warm air that collects near the ceiling back down along the walls. Rooms can feel 2–4°C warmer, allowing you to lower the thermostat.
Low-Cost Strategies ($50–$500)
6. Install a smart thermostat
A smart thermostat (Nest, Ecobee, Honeywell Home) learns your schedule and automatically reduces heat when you’re away or sleeping.
- Annual savings: $130–$250
- Cost: $150–$350 installed
- Payback: 1–2 years
- Many utilities offer rebates of $50–$150 — see energy rebates by province
7. Seal air leaks (weatherstripping and caulking)
Air infiltration is responsible for 25–40% of heating energy loss in older homes. Priority locations:
- Door frames and window frames (apply weatherstripping)
- Gaps around electrical outlets on exterior walls (insulating foam plugs)
- Where walls meet the floor (caulk)
- Around pipes and wires entering the house from outside
Cost: $50–$200 in materials for a DIY project
Savings: $200–$600/year for a drafty older home
8. Insulate your hot water pipes
Insulating the first 1–2 metres of hot water pipes from your water heater with pipe foam ($1–$2/metre) reduces heat loss and lets you lower the water heater temperature by a few degrees. Small savings but essentially free after the one-time cost.
9. Add draft snakes to doors
Old exterior doors often have significant gaps at the bottom. A draft snake (or door draft stopper) is an inexpensive barrier. Combined with weatherstripping, this can noticeably reduce drafts.
Mid-Range Upgrades ($500–$5,000)
10. Add attic insulation
Heat rises. If your attic has inadequate insulation, you are heating the outdoors. In Canada, attics should have R-40 to R-60 insulation (depending on province).
| Existing R-value | Upgrade to R-60 | Annual Savings | Payback |
|---|---|---|---|
| R-20 (older home) | $2,500–$4,000 installed | $400–$800 | 4–7 years |
| R-30 | $1,500–$2,500 | $200–$400 | 5–8 years |
Provincial rebates cover $1,600–$3,200 for attic insulation in many provinces. See home insulation costs.
11. Seal the attic floor (air barrier)
Before or alongside adding insulation, sealing the attic floor stops warm air from rising into the attic. This is often done as part of the same job by insulation contractors and dramatically improves effectiveness.
12. Insulate your basement walls or rim joists
Heat is also lost through uninsulated basement walls and the rim joist (where the floor meets the foundation wall). Rim joist insulation with spray foam is one of the highest-value insulation upgrades.
- Cost: $500–$2,000 DIY or contractor
- Savings: $150–$400/year
Major Investments ($5,000+)
13. Upgrade to a high-efficiency furnace (if keeping gas)
If your gas furnace is over 15 years old and under 90% AFUE, replacing it with a 96–98% AFUE model reduces gas consumption by 15–25%.
- Cost: $3,500–$6,000 installed
- Annual savings: $200–$500/year
- Payback: 7–15 years (varies)
14. Switch to a cold-climate heat pump
For homes currently heated with electric baseboard heaters or heating oil, switching to a cold-climate heat pump can cut heating costs by 50–75%.
- Cost: $8,000–$18,000 installed (before rebates of $2,000–$16,000)
- Annual savings: $800–$3,500 (depending on what you’re replacing)
- See our full heat pump costs and grants guide
15. Upgrade windows (strategic priority)
Windows are often blamed for heat loss but typically account for only 10–25% of heating energy — far less than air leakage and poor insulation. New triple-pane windows cost $500–$1,200 per window installed.
Payback: 20–30 years for most windows, which makes this one of the lower-ROI upgrades. Prioritize windows only if they are single-pane, severely drafty, or compromised. Sealing air leaks around existing windows provides faster payback.
Which Upgrades Should I Do First?
Prioritize in this order for the best return on investment:
- Thermostat optimization (free)
- Air sealing (low cost, high return)
- Smart thermostat (fast payback + rebates)
- Attic insulation (high return + rebates)
- Rim joist/basement insulation (high return)
- Heating system upgrade (heat pump if applicable)
- Windows (lowest ROI — last priority)